ACP Group of States

Brexit Implications for 79 ACP Countries Yet Unknown

By Robert Johnson

LONDON (IDN) - The outcome of the Brexit referendum on June 23, 2016 has set the UK on a path to leave the European Union (EU) that will also result in an end to its membership of the bloc’s Economic Partnership Agreements (EPAs) the free trade deals between the European Union (EU) and the 79 countries of the African, Caribbean and Pacific (ACP) group.

According to experts, while Brexit will have consequences for the UK, its impact on the ACP countries could be far reaching. Precisely how and in what ways was the subject of a brainstorming session of leading experts organized by the Ramphal Institute on July 15.

Named after Shridath "Sonny" Ramphal, second Commonwealth Secretary-General (1975-1990), the Ramphal Institute’s mandate is to tackle development issues and the wider world. So the focus was on Brexit and the Economic Partnership Agreements (EPAs).

The EPA deal had been Europe’s first step, under World Trade Organisation (WTO) guidelines, to wean ACP countries off their special trade relationships with the EU towards freed-up trade deals.

The EPAs had been negotiated in a spirit of support, taking into account the colonial history of the ACP countries, the EU (led very much by the UK, France and Spain) had arrived at the Cotonou agreement – aimed at getting the ACP towards free trade without crippling their growing but fragile post-independence economies.

The Cotonou agreement (which expires in 2020), included a mix of trade, aid development and political co-operation to support the ACP in its changing relationship with Europe.

ACP-EU EPAs have been negotiated since 2002 to facilitate free trade between the EU and ACP regions. The Caribbean region has ratified and is implementing a full EPA, while negotiations have concluded for the West African region, East African Community, and Southern African Development Community.

The Central African, Pacific and greater Eastern and Southern African regions are still addressing outstanding issues. Meanwhile, several states have signed interim individual agreements with the EU while the regional negotiations continue.

In his opening remarks, ACP Secretary General Dr. Patrick Gomes said: "The ACP Group’s relationship with UK lies in the fact that the latter is a member of the EU, and as long as it remains a member (at least until 2019) is therefore bound by all ACP-EU agreements – including the Cotonou Partnership Agreement, EPAs, Everything But Arms agreement and others. There are no bilateral agreements between the UK and ACP as a group," said Dr. Gomes.

"Once the UK’s exit from the EU is completed, will the UK honour the EPAs to which it has attached its signature, or will the UK launch a process of negotiation of bilateral trade arrangements with the countries which make up the ACP?"

He added: “[Brexit] has compelled us at the ACP to address a number of major issues related to the implications of the referendum.” He suggested that systematic analyses will be needed to look at post-Brexit deals – a theme echoed throughout the session as global trade and services experts outlined the hurdles, and also the opportunities, in a post-Brexit world.

The UK has no bilateral agreements with the ACP and, according to Dr Gomes, the UK contributed around 15% of the European Development Fund (EDF) in 2014, which accounted for Euro 4.5bn.

The ACP head and other officials pointed out that, whether the UK chooses to continue making such commitments in its post-Brexit world will be another of those many questions needing answers as government and officials establish a new-look, independent Britain.

Dr Gomes said that the ACP has already started to look at the Brexit impact on EPA follow-up discussions in the future as the Cotonou agreement is due to expire in 2020. He said that the aim of the ACP would be “to minimise the losses and to enhance new areas of co-operation”.

The trade, aid and investment experts at the Ramphal Institute’s post-Brexit discussion outlined both the hurdles and opportunities for a new-look Britain – from remittances and tourism to trade and aid.

Dr Mohammad Razzaque, the Head of International Trade Policy at the Commonwealth Secretariat, predicted a $4bn fall in the value of remittances in the next year. Other speakers outlined dangers of changes in tariffs, preferential arrangements and trade quotas as the UK and Europe set out to negotiate their brave new world.

“To ensure that their trade flourishes rather than being damaged, appropriate trade policies will have to be implemented by all concerned parties, the UK, the EU, the WTO, the rest of the international community and these ACP countries themselves.” [IDN-InDepthNews – 24 July 2016]